A beginner’s guide

Date published: February 2019

Do you have a business with more than 10 employees? Everything used to work correctly, the success grew, so what’s changed? Is the next generation joining the business and needs to take the reins? Is the competition growing and you need to be more efficient? Are things falling through the cracks? Are there mistakes and the customers are no longer as satisfied as they used to be? Maybe the time has come, and a financial system is not enough for you.

Where do you begin? Questions and answers for a computerization beginner.

1. CRM/ERP and their differences
CRM system – Customer Relationship Management – a system for managing customer relations – the system will manage the leads, customers, sales and processes.
ERP system – Enterprise Resource Management – a system that manages all organizational resources, leads, customers, suppliers, sales, procurement, inventory, service, accounting. Some of them are the basic product and some can be purchased as additional modules.
An ERP system also includes a CRM system.
So how do you know what you need? Usually an organization that has valuable inventory needs an ERP system.

2. Isn’t an ERP system too much for me? I only need to use a small percentage of it.
The ERP system encompasses many issues, and allows flexibility and adaptability to different organizations, one of the important things for the success of a project is to focus mainly on the organizational activity, to deal with the common issues and not the unusual issues, and to use the system (at least in the initial phase of the project) only for what is really necessary for the organization.
It is important to understand that the system comes with a collection of very many capabilities and processes. The challenge is to make a small and short project and start working, and the expansions can be made later.
It is highly advisable to try to use the capabilities of the purchased product, and adapt the work method to the system. In cases where this is impossible, the system can be developed and adapted to the organization.

3. There are a lot of software on the market. Where do I start?
The systems can be divided into two main categories:

Single-vendor software

In single-vendor software, the software company is also the one that makes the application, provides the support and development services.

Advantages

• One contact for all problems
• Sometimes the system is designed/specialized in a specific field – for example carpentry management/machining plants
• Sometimes a single provider solution is cheaper (especially at the beginning)

Disadvantages

• There is no flexibility in changing the provider – therefore the stability and quality of service must be examined
• Sometimes the development power of the supplier is limited, and the product does not allow enough capabilities
• Sometimes the systems do not allow connections to other systems

Multi-vendor software

In this case the software company works in collaboration with other companies that specialize in implementing support and programming.

Advantages

There are multiple providers, for the implementation you can choose a provider with experience in the field of your organization

• Usually the development power of the supplier is greater than that of a single-vendor supplier, the software is more flexible and contains solutions for future issues
• There are usually many dedicated solutions developed by the various providers – such as applications and portals designed for the specific system, so the interfaces already exist
  Disadvantages
• Sometimes the initial project is more expensive (for the purpose of adapting the system to the organization) in comparison to a vertical solution designed for the specific field

4. How much will the project cost?
It is advisable to plan the cost of the project before starting it. To estimate the price of the project, a characterization must be written – defining the content of the project. Get quotes from suppliers, then sum up all the costs involved in the project – software licensing, application cost, hardware cost, infrastructure cost, and preferably add 10-20% for additional and unexpected costs.

5. Why is a characterization required?
Writing a characterization means defining the content included in the project. It is possible to only write a characterization in a shortened process, and it is usually quite sufficient for the purpose of estimating costs.

The writing of the characterization should be performed by a professional body that does not depend on the software supplier that is able to carry out the project. The characterization should be distributed to more than one supplier in order to get a cost estimate.

After selecting the supplier and starting the work, a milestone should be defined to examine the correctness and accuracy of the pricing – after completing a detailed characterization by the selected supplier.

6. Defining the content of the project, thinking about the objectives and the business strategy – defining the main activity

When defining the content of the project, you should be thinking about computerization and the optimization of the existing situation, but at the same time one must also think ahead, refer to organizational strategy, think about goals, opening branches/going abroad, interfacing with supplier/customer systems, applications, BI capabilities, and more.

7. Comparing between the options
When looking for an ERP system, it is important to compare alternatives and not purchase the first system you see. In order to compare them, it is advisable to see a presentation of the systems, analyzing each of their advantages, disadvantages, prices and risks.

You could also do a more advanced analysis by comparing the various sections of the ERP’s and giving a score to each system.

8. How can I do this alone?
Choosing a system to manage the organization is something that happens once every 5-10 years, and it is recommended to carry it out professionally with an external consultant who has experience and is familiar with various ERP systems.
Ideally, the consultant will be an objective body, and not a consultant who implements a certain system.

9. What happens after the system works?
The goal is to create a situation where the organization is independent and is able to carry out the ongoing maintenance and small changes by itself. Organizations that continue to become more efficient will be able to add additional modules/subjects beyond the base system after a few months. For example, advanced modules, advanced profitability analysis, field applications, portals and more.
It is important to understand that most organizations continue to add depth and are perfecting their information system, which entails additional financial investment.